Bulgaria: EU's Rebuff Could Signal New Toughness

Prague, 31 January 1997 (RFE/RL) - Bulgarian President Petar Stoyanov came to Brussels this week looking for a handout. What he got was a lecture. The European Union (EU) is still in a mood to dispense free advice, but not free cash.

The EU's External Relations Commissioner, Hans van den Broek, said political parties in Bulgaria had to resolve their differences and create conditions for economic reforms before the country could receive any more credits.

The EU's executive body, the EU Commission, said in a statement that only after this occurs, will it "consider taking the necessary initiatives to mobilize support for Bulgaria from the international financial institutions and the world community."

This can be seen as a harsh rebuff, given the fact that Bulgaria's economy continues its free-fall. The national currency, the lev, has lost half of its value against the US dollar in just one week and nearly four times its worth since the start of the year. Anti-government strikes and demonstrations continue to cripple the country. People are resorting to barter. In one example, villagers in tobacco growing regions are now hoarding their cigarettes for use as "currency."

Stoyanov's arguments about Bulgaria's imminent default on its foreign debt and the toll of the international embargo against rump-Yugoslavia did not carry much weight with the Eurocrats. Van den Broek noted that the EU has already given Bulgaria some 600 million dollars in financial assistance over the past two years. The implied question from the EU is: where is that money now?

A new wave of political and economic crises across Russia and parts of Eastern Europe has refocused attention on the lack of profound reform in many of these countries. The initial influx of Western economic aid, rather than promote reform, often helped former Communist Party bosses transform themselves into a new moneyed class. State monopolies were kept intact but instead used for personal profit by these new "robber barons," who cultivated their political connections.

Writing in Britain's Financial Times, he adds that these people, who now hold sway in Russia as well as Bulgaria, "cannot tackle important social and economic questions," but only those that affect their "short-term power and property."

To many people living in Bulgaria or Russia, who have not seen the West's economic assistance trickle down to them, this is not a revelation. Struggling Bulgarian farmers near the city of Plovdiv told an RFE/RL correspondent this week that they consider a ban on further aid to be good news. The villagers said the EU should not send any more money to Bulgaria's agricultural sector until the West can guarantee that the funds won't strengthen existing monopolies run by the former Communist nomenklatura.

Farmers complain that these monopoly trading firms force them to sell their produce at articificially low prices. That produce is then exported by the firms at a hefty profit. This system thus continues to discourage the emergence of a genuinely-free market. Similar tales abound from Sofia to Vladivostok.

Whether the EU can pressure Bulgaria and other aid recipients into genuine structural economic change remains in doubt. But, tired of seeing its money disappear into the wrong pockets, Brussels is putting Eastern Europe on notice that it may soon demand greater accountability.